common record rules 03jun11

7/31/2019 Common Record Rules 03jun11

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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY PART-II,

SECTION-3, SUB-SECTION (i)]

MINISTRY OF CORPORATE AFFAIRS

Notification

New Delhi, dated the 3

rd

June, 2011

G.S.R. 429(E) - In exercise of the powers conferred by clause (b) of sub-section

(1) of section 642 read with clause (d) of sub-section (1) of section 209 of the Companies

Act, 1956 (1 of 1956), and in supersession of the Cost Accounting Records Rules in so far

as they relate to the Cost Accounting Records Rules published vide (i) G.S.R. 311 dated

2nd

March, 1967, (ii) G.S.R. 1260 dated 10th

August, 1967, (iii) G.S.R. 1447 dated 16th

September, 1967, (iv) G.S.R. 1448 dated 18th

September, 1967, (v) G.S.R. 1467 dated

20th

September, 1967, (vi) G.S.R. 1503 dated 27th

September, 1967, (vii) G.S.R. 2298

dated 15th

September, 1969, (viii) G.S.R. 2574 dated 24th

October, 1969, (ix) G.S.R. 334

dated 25th February, 1972, (x) G.S.R. 1529 dated 27th November, 1972, (xi) G.S.R. 590(E)

dated 29th

December, 1975, (xii) G.S.R. 601(E) dated 31st

December, 1975, (xiii) G.S.R.

606 dated 20th

April, 1976, (xiv) G.S.R. 605 dated 22nd

April, 1976, (xv) G.S.R. 126(E)

dated 24th

March, 1977, (xvi) G.S.R. 157(E) dated 1st

April, 1977, (xvii) G.S.R. 417(E)

dated 28th

June, 1977, (xviii) G.S.R. 45(E) dated 31st

January, 1979, (xix) G.S.R. 506(E)

dated 10th

May, 1984, (xx) G.S.R. 688 dated 25th

June, 1984, (xxi) G.S.R. 767 dated 7th

July, 1984, (xxii) G.S.R. 664 dated 1st

July, 1985, (xxiii) G.S.R. 574 dated 31st

July, 1990,

(xxiv) G.S.R. 258(E) dated 3rd

March, 1993, (xxv) G.S.R. 677(E) dated 29th

October, 1993,

(xxvi) G.S.R. 678(E) dated 29th

October, 1993, (xxvii) G.S.R. 186(E) dated 12th

April, 1996,

(xxviii) G.S.R. 202(E) dated 6th

May, 1996, (xxix) G.S.R. 271(E) dated 9th

July, 1996, (xxx)

G.S.R. 537(E) dated 11th September, 1997, (xxxi) G.S.R. 536(E) dated 11th September,1997, (xxxii) G.S.R. 704(E) dated 28

thSeptember, 2001, (xxxiii) G.S.R. 276(E) dated 24

th

April, 2001, (xxxiv) G.S.R. 277(E) dated 24th

April, 2001, (xxxv) G.S.R. 685(E) dated 8th

October, 2002, and (xxxvi) G.S.R. 562(E) dated 2nd

September, 2004, except as respects

things done or omitted to be done before such supersession, the Central Government

hereby makes the following rules, namely:-

1. Short Title and Commencement- (1) These rules may be called The Companies(Cost Accounting Records) Rules, 2011.

(2) They shall come into force on the date of their publication in the Official

Gazette.

2. Definitions and Interpretations. - In these rules, unless otherwise so provided,---(a) Act means the Companies Act, 1956 (1 of 1956);(b) Compliance Report means compliance report duly authenticated and

signed by a cost accountant in the prescribed form of compliance report;

(c) Cost Accountant for the purpose of these rules means a cost accountantas defined in clause (b) of sub-section (1) of section 2 of the Cost and


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Works Accountants Act, 1959 (23 of 1959) and who is either a permanent

employee of the company or holds a valid certificate of practice under sub-

section (1) of section 6 and who is deemed to be in practice under sub-

section (2) of section 2 of that Act and includes a firm of cost accountants;

(d) Cost Accounting Standards means the standards of cost accounting,issued by the Institute;

(e) Cost Records means books of account relating to utilisation of materials,labour and other items of cost as applicable to the production, processing,

manufacturing or mining activities of the company;

(f) Form-A means the form prescribed in these rules for filing compliancereport and other documents with the Central Government in the electronic

mode;

(g) Form-B means the form of the compliance report and includes Annexureto the compliance report;

(h) Generally Accepted Cost Accounting Principles means the principles ofcost accounting issued by the Institute;

(i) Institute means the Institute of Cost and Works Accountants of Indiaconstituted under the Cost and Works Accountants Act, 1959 (23 of 1959);

(j) Manufacturing Activity includes any act, process or method employed inrelation to -

(i) transformation of raw materials, components, sub-assemblies, orparts into semi-finished or finished products; or

(ii) making, altering, repairing, fabricating, generating, composing,ornamenting, furnishing, finishing, packing, re-packing, oiling, washing,

cleaning, breaking-up, demolishing, or otherwise treating or adapting

any product with a view to its use, sale, transport, delivery or disposal;

or

(iii) constructing, reconstructing, reconditioning, servicing, refitting,repairing, finishing or breaking up of any products.

(k) Mining Activity includes any act, process or method employed in relationto the extraction of ores, minerals, oils, gases or other geological materials

from the earths crust, including sea bed or river bed.

(l) Processing Activity includes any act, process, procedure, function,operation, technique, treatment or method employed in relation to-

(i) altering the condition or properties of inputs for their use,consumption, sale, transport, delivery or disposal; or

(ii) accessioning, arranging, describing, or storing products; or


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(iii) developing, fixing, and washing exposed photographic orcinematographic film or paper to produce either a negative image or

a positive image; or

(iv) printing, publishing, finishing, perforation, trimming, cutting, orpackaging; or

(v) pumping oil, gas, water, sewage or any other product; or(vi) transforming or transmitting, distributing power or electricity; or(vii) harboring, berthing, docking, elevating, lading, stripping, stuffing,

towing, handling, or warehousing products; or

(viii) preserving or storing any product in cold storage; or(ix) constructing, reconstructing, reconditioning, repairing, servicing,

refitting, finishing or demolishing of buildings or structures; or

(x) farming, feeding, rearing, treating, nursing, caring, and stocking ofliving organisms; or

(xi) telecasting, broadcasting, telecommunicating voice, text, picture,information, data or knowledge through any mode or medium; or

(xii) obtaining, compiling, recording, maintaining, transmitting, holding orusing the information or data or knowledge; or

(xiii) executing instructions in memory to perform some transformationand/or computation on the data in the computer's memory.

(m) Product means any tangible or intangible good, material, substance,article, idea, know-how, method, information, object, service, etc. that is

the result of human, mechanical, industrial, chemical, or natural act,process, procedure, function, operation, technique, or treatment and is

intended for use, consumption, sale, transport, store, delivery or disposal.

(n) Product Group in relation to tangible products means a group ofhomogenous and alike products, produced from same raw materials and

by using similar or same production process, having similar physical or

chemical characteristics and common unit of measurement, and having

same or similar usage or application; and in relation to intangible products

means a group of homogenous and alike products or services, produced by

using similar or same process or inputs, having similar characteristics and

common unit of measurement, and having same or similar usage or

application.

(o) Production Activity includes any act, process, or method employed inrelation to -

(i) transformation of tangible inputs (raw materials, semi-finished goods,or sub-assemblies) and intangible inputs (ideas, information, know

how) into goods or services; or


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(ii) manufacturing or processing or mining or growing a product for use,consumption, sale, transport, delivery or disposal; or

(iii) creation of value or wealth by producing goods or services.(p) Turnover means gross turnover made by the company from the sale or

supply of all products or services during the financial year. It includes any

turnover from job work or loan license operations but does not include anynon-operational income;

(q) All other words and expressions used in these rules but not defined, anddefined in the Act and rules made under clause (d) of sub-section (1) of

section 209 of the Act shall have the same meanings as assigned to them in

the Act or rules, as the case may be.

3. Application- (1) These rules shall apply to every company, including a foreigncompany as defined under section 591 of the Act, which is engaged in the

production, processing, manufacturing, or mining activities and wherein, the

aggregate value of net worth as on the last date of the immediately preceding

financial year exceeds five crores of rupees; or wherein the aggregate value of

the turnover made by the company from sale or supply of all products or

activities during the immediately preceding financial year exceeds twenty crores

of rupees; or wherein the companys equity or debt securities are listed or are in

the process of listing on any stock exchange, whether in India or outside India.

Provided that these rules shall not apply to a company which is a body

corporate governed by any special Act;

Provided further that these rules shall not apply to the activities or products

covered in any of the following rules,-

(a) Cost Accounting Records (Bulk Drugs) Rules, 1974(b) Cost Accounting Records (Formulations) Rules, 1988(c) Cost Accounting Records (Fertilizers) Rules, 1993(d) Cost Accounting Records (Sugar) Rules, 1997(e) Cost Accounting Records (Industrial Alcohol) Rules, 1997(f) Cost Accounting Records (Electricity Industry) Rules, 2001(g) Cost Accounting Records (Petroleum Industry) Rules, 2002(h) Cost Accounting Records (Telecommunications) Rules, 2002

4. Maintenance of records- (1) Every company to which these rules apply, includingall units and branches thereof shall, in respect of each of its financial yearcommencing on or after the 1

stday of April, 2011, keep cost records.

(2)The cost records referred to in sub-rule (1) shall be kept on regular basis insuch manner so as to make it possible to calculate per unit cost of production

or cost of operations, cost of sales and margin for each of its products and

activities for every financial year on monthly/quarterly/half-yearly/annual

basis.


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(3)The cost records shall be maintained in accordance with the generallyaccepted cost accounting principles and cost accounting standards issued by

the Institute; to the extent these are found to be relevant and applicable. The

variations, if any, shall be clearly indicated and explained.

(4)The cost records shall be maintained in such manner so as to enable thecompany to exercise, as far as possible, control over the various operations

and costs with a view to achieve optimum economies in utilization of

resources. These records shall also provide necessary data which is required

to be furnished under these rules.

(5)All such cost records and cost statements, maintained under these rules shallbe reconciled with the audited financial statements for the financial year

specifically indicating expenses or incomes not considered in the cost records

or statements so as to ensure accuracy and to reconcile the profit of all

product groups with the overall profit of the company. The variations, if any,

shall be clearly indicated and explained.

(6)All such cost records, cost statements and reconciliation statements,maintained under these rules, relating to a period of not less than eight

financial years immediately preceding a financial year or where the company

had been in existence for a period less than eight years, in respect of all the

preceding years shall be kept in good order.

(7) It shall be the duty of every person, referred to in sub-section (6) and (7) ofsection 209 of the Companies Act, 1956 (1 of 1956), to take all reasonable

steps to secure compliance by the company with the provisions of these

rules in the same manner as he is liable to maintain accounts required under

sub-section (1) of section 209 of the said Act.5. Form of the Compliance Report - Every company to which these rules apply shall

submit a compliance report, in respect of each of its financial year commencing

on or after the 1st

day of April, 2011, duly certified by a cost accountant, along

with the Annexure to the Central Government, in the prescribed form.

6. Time limit for submission of Compliance Report Every company shall submitthe compliance report referred to in rule 5 to the Central Government within

one hundred and eighty days from the close of the companys financial year to

which the compliance report relates.

7. Authentication of Annexure to the Compliance Report The Annexureprescribed with the compliance report, as certified by the cost accountant, shallbe approved by the Board of Directors before submitting the same to the Central

Government by the company.

8. Penalties (1) If default is made by the cost accountant in complying with theprovisions of these rules, he shall be punishable with fine, which may extend to

five thousand rupees.


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(2) If a company contravenes any provisions of these rules, the company andevery officer thereof who is in default, including the persons referred to in

sub-section (6) of section 209 of the Act, shall be punishable as provided

under sub-section (2) of section 642 read with sub-sections (5) and (7) of

section 209 of Companies Act, 1956 (1 of 1956).

9. Savings- The supersession of the Cost Accounting Records Rules, shall not in anyway affect-

a) any right, obligation or liabilities acquired, accrued or incurredthereunder;

b) any penalty, forfeiture or punishment incurred in respect of anycontravention committed thereunder; and

c) any investigation, legal proceeding or remedy in respect of any such right,privilege, obligation, liability, penalty, forfeiture or punishment as

aforesaid, and; any such investigation, legal proceeding or remedy may

be instituted, continued or enforced and any such penalty, forfeiture or

punishment may be imposed as if those rules had not been superseded.

[F. No. 52/10/CAB-2010]

B.B.GOYAL

ADVISER (COST)


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FORM-A Form for filing Compliance Report and other documents

with the Central Government

[Pursuant to section 209(1)(d), 600(3)(b) of the Companies Act, 1956 and rule 2 of The Companies (Cost

Accounting Records) Rules, 2011]

PART I - GENERAL INFORMATION

Note: All fields marked in * are to be mandatorily filled.

1 (a) *Corporate identity number (CIN) or

foreign company registration number of

the company

Pre-Fill

(b) Global location number (GLN) of company

2 (a) *Name of the company

(b) *Address of the registered office or of the

principal place of business in India of thecompany

(c) *E-mail Address of the company

3 (a) *Financial year covered by the compliance

reportFrom (DD/MM/YYYY)

To (DD/MM/YYYY)

(b) *Date of Board of directors meeting in which annexure to the

compliance report was approved (DD/MM/YYYY)

4. Details of the cost accountant

(a) *Category of the cost accountantIndividual Cost accountants firm

(b) In case of individual, whether the cost accountant is in

permanent employment of the company or in practiceIn Employment In Practice

(c) *Name of the cost accountant or the cost

accountants firm who has certified the cost

records of the company

(d) *Income tax permanent account number of the cost accountant or the cost

accountants firm

(e) *Membership number of cost accountant or cost accountants firms registration

number

(f) Address of the cost accountant or cost accountants firm

(i) Line I

Line II

(ii) City

(iii) State

(iv) Country

(v) Pin Code


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(g) *E-mail ID of the cost accountant or cost

accountants firm

5. *Quantitative Information

Sno. Name of the Product / Service Group Unit Annual

Production

(Qty.)

Net Sales

(Qty.) (Value in

Rupees)

A Produced / Manufactured Product Groups

1.

2.

3. etc.

B Services Groups

1.

2.

3. etc.

C Trading Activities (Product Group-wise)

1.

2.

3. etc.

D Other Income

Total Income as per Financial Accounts

PART-II

Attachments:

1

Compliance report as per The Companies (Cost Accounting

Records) Rules, 2011 Attach

2 Optional attachments(s) if any Attach

List of attachments

Remove attachment

Verification:

To the best of my knowledge and belief, the information given in this form and its attachments is correct and

complete.

I have been authorised by the Board of directors resolution

numberdated (DD/MM/YYYY)

to sign and submit this form.

I am authorised to sign and submit this form.

To be digitally signed by:

Managing Director or director or manager or secretary (in case of an Indian company) Digital

Signaturesor an authorised representative (in case of a foreign company)

*Designation


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*Director identification number of the director or Managing Director; or Income-tax PAN of the

manager or of authorised representative; or Membership number, if applicable or income-tax

PAN of the secretary (secretary of a company who is not a member of ICSI may quote his/her

income-tax PAN)

Director of the companyDigital

Signatures

Director identification number of the director

Modify Check Form Pre-scrutiny Submit

This e-form has been taken on file maintained by the Central Government through electronic mode and on the

basis of statement of correctness given by the filing company

FORM-BFORM OF COMPLIANCE REPORT

[See rule 2, and rule 5]

I/We ........................................... being in permanent employment of the company / in practice, and having

been appointed as cost accountant under Rule 5 of the Companies (Cost Accounting Records) Rules, 2011

of ........................................................... (mention name of the company) having its registered office at

..................................................... (mention registered office address of the company) (hereinafter referred

to as the company), have examined the books of account prescribed under clause (d) of sub-section (1) of

section 209 of the said Act, and other relevant records for the period/year ............................. (mention the

financial year) and certify as under:

1 I/We have/have not obtained all the information and explanations, which to the best of my/our

knowledge and belief were necessary for the purpose of this compliance report.

2 In my/our opinion, proper cost records, as per Companies (Cost Accounting Records) Rules, 2011

prescribed under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956, have/have

not been maintained by the company so as to give a true and fair view of the cost of

production/operation, cost of sales and margin of all the products/activities of the company.

3 Detailed unit-wise and product/activity-wise cost statements and schedules thereto in respect of the

product groups/activities are/are not kept in the company.

4 In my/our opinion, the said books and records give/do not give the information required by the

Companies Act, 1956 in the manner so required.

5 In my/our opinion, the said books and records are/are not in conformity with the generally accepted

cost accounting principles and cost accounting standards issued by The Institute of Cost and Works

Accountants of India, to the extent these are found to be relevant and applicable.

Dated: this ____ day of _________ 20__ at _________________ (mention name of place of signing this

report)

SIGNATURE & SEAL OF THE COST ACCOUNTANT (S)

MEMBERSHIP NUMBER (S)


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NOTES:

(i) Delete words not applicable.(ii) If as a result of the examination of the books of account, the cost accountant desires to point out

any material deficiency or give a qualified report, he shall indicate the same against the relevant

para.

(iii) Briefly give your observations and suggestions, if any, relevant to the maintenance of costaccounting records by the company.

(iv) Cost accountant may use separate sheet(s) for (ii) and (iii) above, if required.


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ANNEXURE TO THE COMPLIANCE REPORT

[See rule 2 and rule 5]

1. GENERAL:

a) Name of the company:b) Registered office address:c)

Financial year to which the Compliance Report relates.

2. QUANTITATIVE INFORMATION:

Sno. Name of the Product / Service Group Unit Annual

Production

(Qty.)

Net Sales

(Qty.) (Value in

Rupees)

A Produced / Manufactured Product

Groups

1.

2.

3. etc.B Services Groups

1.

2.

3. etc.

C Trading Activities (Product Group-wise)

1.

2.

3. etc.

D Other Income

Total Income as per Financial Accounts

3. RECONCILIATION STATEMENT:

Net Margin (Profit/Loss) as per Cost Accounts (In Rupees)

A. From Produced / Manufactured Product Groups

B. From Services Groups

C. From Trading Activities

Total as per Cost Accounts

Add: Incomes not considered in Cost Accounts (if any)

Less: Expenses not considered in Cost Accounts (if any)

Add/Less: Difference in Stock Valuation

Profit/(Loss) as per Financial Accounts

NOTES:

(i) For produced/manufactured product groups, use the nomenclature as used in the Central ExciseAct/Rules, as applicable.

(ii) For services groups, use the nomenclature as used in the Finance Act/Central Service Tax Rules, asapplicable.

SIGNATURE

NAME

COST ACCOUNTANT (S)MEMBERSHIP NUMBER (S)

SEAL

DATE

common record rules 03jun11

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